While just a month ago Norwegian Air Shuttle received loan guarantees of NOK6 billion (£445 million) from the Norwegian government, the struggling low-cost operator now finds itself bankrupt regarding its subsidiaries in Sweden and Denmark.
The airline has said that the financial support packages offered by the two Scandinavian countries were not sufficient to keep the subsidiaries open. Pilot Services Sweden AB, Norwegian Pilot Services Denmark ApS, Norwegian Cabin Services Denmark ApS, and Norwegian Air Resources Denmark LH ApS employ pilots and cabin crew in Sweden and Denmark. At the same time, Norwegian is ending staffing arrangements with OSM Aviation which supplies crew in Spain, UK, USA, Finland and other staff in Sweden.
The move leaves only 700 pilots and 1 300 cabin crew in Norway, France and Italy still employed by the airline, with 1 571 pilots and 3 134 cabin staff looking for other work. This represents about a 70% reduction in staff.
Norwegian’s chief executive Jacob Schram said in a statement that ‘It is heart-breaking that our Swedish and Danish pilot and cabin crew subsidiaries now are forced to file for bankruptcy, and I’m truly sorry for the consequences this will have for our colleagues.’ He added that ‘We are working around the clock to get through this crisis and to return as a stronger Norwegian with the goal of bringing as many colleagues back in the air as possible.’
Like other long-haul/low-cost carriers, Norwegian was in significant financial difficulties before the coronavirus outbreak. It now seems to be on the point of contraction to a regional LCC, their experiment of long-haul being over for the time being and perhaps forever.